Safeway 1Q Profit Up 11%

San Francisco Safeway Inc. reported Thursday that its profit rose 11% in the first quarter, boosted by the Easter holiday, a weak dollar and higher gas sales.

The grocer earned $193.4 million for the January-March period, up from $174.4 million a year earlier. Revenue rose 7% to $10 billion from $9.3 billion in the year-ago period.

Safeway said same-store sales rose 4.5%, or 2.9% excluding fuel. But adjusting for Easter revenue, which was in the second quarter last year, those sales rose only 2%.

Same-store sales grew 2.7% last quarter, the lowest growth rate in nearly two years.

CEO Steve Burd said in a conference call with investors that cost-cutting measures and price competitiveness paid off to deliver strong revenue, but that the credit squeeze and rising food prices are clearly affecting consumer behavior.